Editorial: The deficit challenge

Friday

Jan 29, 2010 at 12:01 AMJan 29, 2010 at 12:04 AM

Even before his State of the Union address, President Barack Obama announced a three-year deficit-reduction plan, the political calculus perhaps being to show voters that his administration is serious about the economy and to distract attention from the potential debacle of health-care reform.

Even before his State of the Union address, President Barack Obama announced a three-year deficit-reduction plan, the political calculus perhaps being to show voters that his administration is serious about the economy and to distract attention from the potential debacle of health-care reform.

Very quickly the president and his lieutenants will learn that deficit reduction is like health-care reform: Everybody's in favor of it until somebody actually tries to do it, and then the voters go nuts.

The difficulty became clear Tuesday, when the Senate considered a bipartisan proposal to create a commission on the national debt. The opposition was bipartisan as well: Republicans who worried the commission might recommend tax increases and Democrats afraid it would force cuts in Medicare and Social Security. There were 53 votes in favor of the bill and 46 opposed, and, since in this Senate, it takes 60 votes to send out for coffee, the initiative failed.

Obama announced in Wednesday's address that he would name a similar bipartisan commission on the deficit, but it won't have authority to force an up-or-down vote on a package of recommendations. We wouldn't bet on its prospects for success.

Obama is also calling for a three-year hard freeze of federal spending. In a soft freeze, spending on a federal program grows but only to keep pace with inflation and population growth. In a hard freeze, spending does not, meaning the program suffers an effective cut.

Exempt from Obama's freeze are defense spending, Veterans Affairs, homeland security, international affairs, Social Security, Medicare and Medicaid, the programs where the government will spend most of its $3.5 trillion budget.

What's left is the $447 billion the government will spend on the Justice Department, Housing and Urban Development, Health and Human Services, Energy, Transportation, Agriculture, Interior, all agencies where the public will see and feel the impact of the cuts. Liberal Democrats, already outraged at the administration over Afghanistan and the dropping of the option for government health insurance, will be further outraged.

And the deficit reduction will be modest. It will shave about $15 billion off next fiscal year's projected deficit in excess of $1 trillion. Over the next decade, the freeze would save $250 billion. But in that time, the Congressional Budget Office says, under current laws the national debt, the total of cumulative deficits, will double from $7.5 trillion to $15 trillion, just over two-thirds of GDP.

The administration makes the obvious argument: Deficit reduction has to start somewhere and that if the freeze shows the public that the White House and Congress are serious about reining in spending, then voters will sit still for the necessary cuts in entitlements and tax increases needed to truly close the budget gap.

If Obama thought health-care reform was hard, wait until he tries to get serious about deficit reduction.

Market Place

Original content available for non-commercial use under a Creative Commons license, except where noted.
MetroWest Daily News, Framingham, MA ~ 33 New York Ave., Framingham, MA 01701 ~ Privacy Policy ~ Terms Of Service